Question 1

Which group of farmers benefits the least from price supports in agriculture?

Accepted Answer

A)  those farmers receiving the highest average farm-family income
B)  those farmers receiving the midrange average farm-family income
C)  those farmers receiving the lowest average farm-family income
D)  large corporate farmsE) A) and C)
F) All of the above

Question 2

About 10 percent of the U.S. labor force is in agriculture.

Accepted Answer

A) True 
 B)False

Question 3

Comparing an acreage allotment program versus a taxpayer-subsidized price-support program, the acreage allotment program

Accepted Answer

A)  and the price-support program have similar costs to the taxpayers.
B)  imposes a smaller cost on the taxpayers.
C)  imposes a larger cost on the taxpayers.
D)  does not impose a cost on the consumers.E) B) and D)
F) A) and C)

Question 4

The parity ratio initially stood at 0.5. Then after several years, the prices received by farmers doubled while the prices they paid tripled. This will bring the parity ratio to

Accepted Answer

A)  0.25.
B)  0.33.
C)  0.75.
D)  0.8.E) C) and D)
F) All of the above

Question 5

An example of the special interest effect is a farm program from which a large group receives small benefits at the expense of a smaller group who individually suffer large losses.

Accepted Answer

A) True 
 B)False

Question 6

Refer to the graph of the market for wheat. The government adopts a price support program for wheat and supports the wheat price at P ₂. As a result of this price support program,

Accepted Answer

A)  there will be a shortage of wheat in the amount of AB.
B)  there will be a surplus of wheat in the amount of Q₁ Q₂.
C)  there will be a surplus of wheat in the amount of Q₀ Q₂.
D)  wheat farmers will receive less total income than if there were no price support program.E) C) and D)
F) B) and D)

Question 7

Farm share of U.S. GDP has

Accepted Answer

A)  declined from about 12 percent in 1950 to 1 percent today.
B)  declined from about 12 percent in 1950 to 7 percent today.
C)  declined from about 7 percent in 1950 to 1 percent today.
D)  remained relatively stable over the past 50 years.E) A) and B)
F) B) and C)

Question 8

Refer to the graph. An increase in the price of agricultural products from Pᵦ to Pₐ will

Accepted Answer

A)  increase farm incomes by 0 Pₐ AQₐ .
B)  decrease farm incomes by 0 Pᵦ EQₐ .
C)  decrease farm incomes from 0 Pᵦ BQᵦ to 0 Pₐ AQₐ .
D)  increase farm incomes from 0 Pᵦ BQᵦ to 0 Pₐ AQₐ .E) A) and B)
F) All of the above

Question 9

List at least five of the technological advances over the last half century in agriculture. What are some of the more recent advanced information technologies for farmers?

Accepted Answer

Some of the technological advances in ag...

Question 10

Refer to the graph of the supply and demand for agricultural products. The supply and demand for agricultural products are in initial equilibrium at point 1. Technological progress in agriculture will

Accepted Answer

A)  shift D₁ to D₂ and cause farm incomes to fall.
B)  shift S₁ to S₂ and cause farm incomes to fall.
C)  change equilibrium from point 1 to point 2 and cause farm incomes to rise.
D)  change equilibrium from point 1 to point 6 and cause farm incomes to fall.E) All of the above
F) C) and D)

Question 11

Public policy has been ineffective in alleviating the resource misallocation problem in American agriculture.

Accepted Answer

A) True 
 B)False

Question 12

The demand for most agricultural products is

Accepted Answer

A)  elastic with respect to price but inelastic with respect to income.
B)  inelastic with respect to price but elastic with respect to income.
C)  elastic with respect to both price and income.
D)  inelastic with respect to both price and income.E) A) and B)
F) A) and C)

Question 13

Approximately what percentage of American consumers' total spending is on food?

Accepted Answer

A)  about 10 percent
B)  20-25 percent
C)  about 30 percent
D)  more than 40 percentE) A) and D)
F) B) and D)

Question 14

Which diagram best represents the problem faced by farms in the long run?

Accepted Answer

A)  A
B)  B
C)  C
D)  DE) All of the above
F) B) and C)

Question 15

The ambitious plan to wean American agriculture from subsidies, as embodied in the Freedom to Farm Act of 1996,

Accepted Answer

A)  became fully realized by 2000.
B)  unraveled in 1998 and 1999 when farm prices fell.
C)  was not approved by the president.
D)  was extended in 2002.E) A) and D)
F) All of the above

Question 16

An increase in the supply of farm products relative to the demand for them tends to cause farm incomes to decline.

Accepted Answer

A) True 
 B)False

Question 17

In 2015, Farmer Levi grew only soybeans and received payments under the agricultural risk coverage program of the Agricultural Act of 2014. Which of the following best explains why Farmer Levi received these payments?

Accepted Answer

A)  The price of soybeans fell below a specified threshold.
B)  The total revenue of all farmers in the county fell below a specified threshold.
C)  The total revenue by all soybean growers in the county fell below a specified threshold.
D)  The total revenue of all soybean farmers participating in the program fell below a specified threshold.E) A) and B)
F) A) and C)

Question 18

Which of the following is not a reason to predict that farm subsidies might decline in the future?

Accepted Answer

A)  a declining farm population
B)  the special interest effect
C)  pressure to cut the budget deficit
D)  conflicts with free world tradeE) A) and B)
F) A) and C)

Question 19

Farm programs such as those of the United States and the European Union

Accepted Answer

A)  encourage the United States and the European Union to use tariffs and quotas to restrict agricultural imports.
B)  cause U.S. and EU farmers to produce less than domestic consumers want to purchase.
C)  increase world market prices for agricultural products.
D)  raise farm output in developing nations.E) C) and D)
F) B) and D)

Question 20

If the demand for agricultural products is inelastic, a relatively small increase in supply will cause farm prices and incomes to decline.

Accepted Answer

A) True 
 B)False

Exam 22: Agriculture: Economics and Policy

Farm share of U.S. GDP has

Correct AnswerverifiedShow Answer

Comparing an acreage allotment program versus a taxpayer-subsidized price-support program, the acreage allotment program

Correct AnswerverifiedShow Answer

About 10 percent of the U.S. labor force is in agriculture.

Correct AnswerverifiedShow Answer

An example of the special interest effect is a farm program from which a large group receives small benefits at the expense of a smaller group who individually suffer large losses.

Correct AnswerverifiedShow Answer

Which diagram best represents the problem faced by farms in the long run?

Correct AnswerverifiedShow Answer

Refer to the graph of the supply and demand for agricultural products. The supply and demand for agricultural products are in initial equilibrium at point 1. Technological progress in agriculture will

Correct AnswerverifiedShow Answer

Refer to the graph. An increase in the price of agricultural products from Pᵦ to Pₐ will

Correct AnswerverifiedShow Answer

Approximately what percentage of American consumers' total spending is on food?

Correct AnswerverifiedShow Answer

The parity ratio initially stood at 0.5. Then after several years, the prices received by farmers doubled while the prices they paid tripled. This will bring the parity ratio to

Correct AnswerverifiedShow Answer

Which of the following is not a reason to predict that farm subsidies might decline in the future?

Correct AnswerverifiedShow Answer

The demand for most agricultural products is

Correct AnswerverifiedShow Answer

If the demand for agricultural products is inelastic, a relatively small increase in supply will cause farm prices and incomes to decline.

Correct AnswerverifiedShow Answer

List at least five of the technological advances over the last half century in agriculture. What are some of the more recent advanced information technologies for farmers?

Correct AnswerverifiedSome of the technological advances in ag...View AnswerShow Answer

Which group of farmers benefits the least from price supports in agriculture?

Correct AnswerverifiedShow Answer

Farm programs such as those of the United States and the European Union

Correct AnswerverifiedShow Answer

The ambitious plan to wean American agriculture from subsidies, as embodied in the Freedom to Farm Act of 1996,

Correct AnswerverifiedShow Answer

An increase in the supply of farm products relative to the demand for them tends to cause farm incomes to decline.

Correct AnswerverifiedShow Answer

In 2015, Farmer Levi grew only soybeans and received payments under the agricultural risk coverage program of the Agricultural Act of 2014. Which of the following best explains why Farmer Levi received these payments?

Correct AnswerverifiedShow Answer

Refer to the graph of the market for wheat. The government adopts a price support program for wheat and supports the wheat price at P ₂. As a result of this price support program,

Correct AnswerverifiedShow Answer

Public policy has been ineffective in alleviating the resource misallocation problem in American agriculture.

Correct AnswerverifiedShow Answer

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Some of the technological advances in ag...
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